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Will our credit debt ever be paid off?

People born in different generations usually have different approaches to the problems they encounter, and credit debt is no exception. For instance, a recent article noted that some types of loans, like car loans lasting more than just a few years and home equity loans, were less common 60 years ago than they are today. As a result, the percentage of a household's income that needed to be devoted to debt back then was far lower than it is today. Nowadays, however, even after the financial crisis of recent years, getting a loan is much easier. And it appears that many people have been taking advantage of that fact.

The article also noted that people born in the 1980s and 1990s, a generation known as the "millennials," have accumulated such large private debts, coupled with the ever-increasing debt of the federal government, that there is no possibility that those debts could be repaid. People born in the '80s and '90s - now in their twenties and thirties - make up the vast majority of borrowers of student loans, an issue which readers who have seen previous posts here know is going to become a massive problem for our country sooner rather than later. However, credit cards are also playing a key role in personal debt.

An unmanageable debt burden can have a hugely negative impact on a person - and not just on their credit report either. Some borrowers get depressed about the seeming lack of options, and many simply yearn for a fresh start. The good news is that Chapter 7 bankruptcy can be that option many people are looking for. While this form of bankruptcy can't do anything about a person's student loan debts at this time, other debts can be discharged through a successful Chapter 7 bankruptcy filing.

Source: San Diego Source, "Millennials face lifetime of crushing debt," John Patrick Ford, Oct. 24, 2013

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